CRYPTO CURRENCIES

WHAT ARE CRYPTO CURRENCIES?

• Crypto currencies are a type of digital or virtual currencies that use cryptography for security.This security feature make it difficult to counterfeit them.
• These Currencies operate independently of a central ban like RBI, rendering them immune from government interference or Manupulation.
• The decentralized control of each cryptocurrency works through a blockchain, which is public transaction database,functioning as a distributed ledger.
• Bitcoin, created in 2009, was the first decentralized Cryptocurrency. since then, over 1,800 Cryptocurrency have been created.

What is a Bitcoin?

A bitcoin is a digital currency that can be used only for online transaction, it is also known as cryptocurrency as it is generated using software based on a complex field of mathematics called cryptography.

When you buy something from a store using cash, the shopkeeper gets tangible money from you, There is no problem of trust as you are paying legal tender issued by the central bank to buy your product. However , in an online transaction where you cannot see the person you are dealing with and you are making virtual money transfer, a question of trust arises. The bank pays an important role in solving this problem between  the two people involved by being a neutral witness to the online transaction and also keeping a record of it. This is how credit card and debit card transaction occur.

     The bitcoin system is an alternate way of establishing trust online, without the Bank. This system enable many people to participate and act as a witnesses online. The first ones to record ad verify transaction using the cryptography-based software are paid in a currency called'bitcoin'. Those who record a block of transactions any given point of time using cryptography and are paid in bitcoins are called 'miners' and the process itself is called 'mining'. This is the only way new bitcoins can be generated. These bitcoins can in turn be used for online transaction as long as it is permitted by the central authority in any given country.

Transacting with bitcoin

In order to transact with bitcoins, you first need to setup a bitcoin wallet, which is the equivalent of a bank account. This is held either on a phone or on a computer. It allows you to receive, store and send bitcoins anywhere in the virtual world. Different countries of the world have different policies when it comes to trading with bitcoins in India, The central government prohibits the use of bitcoins for transactions. In other words, you cannot use them to buy or sell anything in India.

Growth of bitcoins

In 2009, When the bitcoin was first traded, it's value was pegged at $0.0007 per bitcoin, In 2011, it became $1 per bitcoin. In November 2013 it is valued peaked at $1242. In December 2017, the value of a bitcoin surpassed $ 11,000. These statistics indicate that may more people want to own bitcoins, which are limited in supply and as a result, the value of a bitcoin is continuously increasing.

Why is there a growing interest in bitcoins?

The bitcoins system offers a variety of advantages. The name a few, the cost of accepting bitcoins is extremely low compared to the cost involve in other payment systems such as a credit cards. money is saved on every transaction you make. bitcoins transaction are a lot faster then the traditional method of payment. Also there is proof to validate the transactions. All transactions that occur are recorded in a public accounting ledger.No one can resort to cheating by saving they did not receive bitcoin as every transaction is out in the open. In addition, every user can remain anonymous, Which makes it difficult for any authority to track down the number of bitcoins owned by any one person.

Downside of bitcoins

for one, bitcoins are not widely accepted. secondly, there is no central authority governing the currency. It several user stop using the currency for some reason, the value can crash, making it worthless.